| Duopoly outcome with collusion: Each firm agrees to produce Q = 170, earns profit = $6,800. |
| If Vodafone reneges on the agreement & produces Q = 360, what happens to the market price? And Vodafone's profits? |
| Is it in Vodafone's interest to renege on the agreement? |
| If both firms renege and produce Q = 350, determine each firm's profits. |
|
| P | Q |
| $0 | 1000 |
| $5 | 900 |
| $10 | 800 |
| $15 | 700 |
| $20 | 600 |
| $30 | 500 |
| $40 | 420 |
| $50 | 300 |
| $60 | 200 |
| $70 | 100 |
|